In Formal Papers Submitted by for Public Hearing in Houston, CSB Offshore Safety Consultants Examine Performance Indicators as an Effective Way to Preventing Catastrophic Accidents like Deepwater Horizon

Washington, DC, July 20, 2012 - Among the most effective means of preventing catastrophic accidents like the one that struck the Deepwater Horizon could be for offshore drilling companies to be required to gather and publicly report effective safety performance indicators.

With the caveat that there is no silver bullet to preventing accidents, that is the view that prevails in several detailed papers submitted by CSB safety expert consultants engaged in advance of a two-day public hearing related to the CSB’s ongoing investigation of the explosion aboard the Deepwater Horizon which occurred on April 10, 2010.

The papers are part of the record being gathered by the CSB on the subject of indicators. Over two days, the Board will hear testimony from international regulators, workforce representatives and industry groups to explore how companies and regulators use safety metrics to manage risks and drive continuous safety improvements. While the papers submitted by the CSB consultants generally favor the development of certain indicators, other views may be presented by panelists at the meeting.

Renowned safety expert Dr. Andrew Hopkins says in Safety Indicators for Offshore Drilling that there is a “need for indicators specifically related to the risks of a blowout, especially offshore. Dr. Hopkins is a Professor of Sociology at the Australian National University in Canberra and a Fellow of the Safety Institute of Australia. Referring to the explosion at the BP refinery in 2005 which killed 15 workers which was the subject of a book he authored, Dr. Hopkins, writes, “One of the main lessons coming out of the Texas City disaster was the need for a separate focus on process safety as opposed to personal safety.”

Professor Hopkins reviews American Petroleum Institute Recommended Practice 754 concerning the reporting of indicators - which was issued in response to a CSB recommendation following the Texas City accident - and analyzes how well it may apply to offshore drilling operations. He reviews regulatory reporting requirements in several jurisdictions and compares the United States to Norway and Australia which have significant offshore drilling operations. After listing key reportable indicators, such as well kicks, flammable gas leaks, fires and explosions, safety-critical equipment damage and other factors, he concludes, It is notable that the list for the U.S. [of reportable incidents] does not include all gas releases or even all gas releases of more than a certain size...

He notes the U.S. does not require well kicks to be reported. “In contrast,” Professor Hopkins writes, "both the Norwegian and Australian regulators require that all hydrocarbon releases and all kicks be reported.” In addition, he points out that a previous well kick on the Deepwater Horizon - a month before the explosion - went unnoticed for 33 minutes. “One can therefore easily imagine an indicator based on response time to kicks," he concludes, adding the U.S. regulator (the Bureau of Safety and Environmental Enforcement) should develop and mandate the reporting of the number of well cementing failures and the number of gas alarms.

A treatise by Ian Whewell , who is scheduled to speak at the CSB hearing, examines the need for safety performance indicators from the perspective of a former official who until his retirement in 2009 was director of the Offshore Division of the United Kingdom’s Health and Safety Executive (HSE) Hazardous Installations Directorate. He notes the HSE has produced a definitive guide to the development of performance indicators for major hazard industries, and in addition the government regulator has been working with the offshore industry on the UK Continental Shelf to improve the utilization of indicators to monitor and control major accident risks.

Despite this work, he writes in the paper, it is clear that performance indicators are in many companies still not being used as effectively as they should be to control major accident risks.

Mr. Whewell cautions, "Let us be clear there is no ‘silver bullet’ which will ensure that catastrophic accidents do not occur in the offshore industry." However, he argues, "properly selected performance indicators, whose data outputs are effectively monitored and which inform decision making, will make a significant contribution to reducing the risks of such an event occurring."

He notes performance indicators on their own won’t control major hazard risks in the offshore industry. “The key to delivering improved control of major hazard risks is how industry leaders at Board and senior management levels utilize performance indicators and how the data derived from their use informs decision-making at all levels.”

Calling on his years of experience regulating offshore drilling and production, Mr. Whewell goes on in detail to discuss, among other things, the need to understand the risks involved, the need for understanding “the process” and “the hazards," what should be measured, and what to do with data. For the latter, he advocates maximizing the benefits of gathering and reporting effective safety indicators. “Meeting the challenge of sharing the data and then benchmarking against the best performers is a real driver for change and improvement in performance.&"

Finally, he recounts HSE’s experience on the UK Continental Shelf and how the regulator has worked with industry to improve safety performance. He recounts that after Texas City, the UK offshore industry agreed to adopt two additional key performance indicators: backlog of safety critical maintenance, and findings regarding the status of safety critical equipment outstanding after a set period of time. These were indicators, among many, that the CSB found could have warned the company of the possibility of a major accident.

Peter Wilkinson, whose broad experience in drilling production safety includes being the principal architect for the development of the Australian National Offshore Petroleum Safety Authority, submitted a report entitled “Progress on Process Safety Indicators - Necessary but not Sufficient. Mr. Wilkinson is now managing director of Noetic Risk Solutions, which provides strategic advice to governments and industry on safety management in the oil and gas industry.

After reviewing the status of progress in developing safety indicators in the U.S., including the American Petroleum Institute's Recommended Practice 754 in 2010, Mr. Wilkinson concludes that “Whilst there is tangible progress on safety indicators relevant to the major incident which can occur in offshore petroleum safety, this progress seems limited in scope compared with what could be done in the light of existing knowledge.” He laments that despite this progress, personal safety measures such as lost time injury frequency (LTIFR) rates or similar measures appear to be still given too much prominence by companies despite their well-known weaknesses.

He notes that “safety is not easy to measure,” and that “we have to do it by inference from a surrogate indicator which we believe tells us something about safety.”

Mr. Wilkinson, who will speak on one of the panels, reviews the history of safety indicators, what has been learned from them, problems with them, and recent developments, including API RP 754, which he questions will “give us quickly enough the detailed information needed to enable preventive activities to be effectively targeted.

Still, he calls the Recommended Practices (API’s and a more recent one developed by the International Association of Oil and Gas Producers (OGP), to be "real advances." But, he asks, “are they sufficient?” Saying the measures being collected are too narrow and give enough emphasis to drilling and well related events, Mr. Wilkinson concludes, “The answer, at least in this writer's opinion, especially in relation to upstream production, is no.

Noting that the focus on loss of containment (arising from the Deepwater Horizon blowout) leaves out other types of major incidents which can occur, he asks, "Are we a bit like an army fighting the last war?" His recommendations include developing and implementing a wider set of indicators based on the major incidents to which upstream petroleum is susceptible but not limited to drilling. Among other suggestions, he advocates removing the term "process safety indicators" and replacing it with "major incident indicators."

The papers are available on the CSB's Public Hearing Webpage.

The hearing will take place from 9 a.m. to 5 p.m. on July 23 and 24, 2012, at the Hyatt Regency Hotel, 1200 Louisiana Street, in Houston, Texas. The hearing is free and open to the public. Members of the audience will have an opportunity to comment and to submit questions for the panel participants. Please see our website for more information on the hearing, including previews of panelist statements and instructions for submitting a comment or question. To register for the event email register**At_Symbol_Here**csb.gov

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